National Highways has asked his contractors to provide details of their anti-fraud and corruption policies after on-going concern about potential problems on major roads projects.

In a letter to contractors National Highway, has given Tier 1 contractors 14 days to provide copies of their current economic crime policies and associated supporting documents as well as asking them to confirm the procedures they use to be compliant across their supply chain.

The letter follows concern surrounding allegations of potential fraud and failure to procure subcontractors along agreed guidelines.

There have already been investigations by the agency’s counter fraud unit into claims of corrupt practices on some smart motorway schemes where costs have spiralled, reports Construction Enquirer.

To date, National Highways said that no evidence has been substantiated of the law being broken.

The letter says:  “Following several recent audits undertaken by our assurance services and corporate compliance teams we have identified some areas at the Tier 1 level where there are potential weaknesses or poor practices being applied.

“In recent years we have also noted an increase in the number of allegations of potential fraud or impropriety raised with us, focussing on a failure by our contractor or their supply chain to procure in line with National Highways contracts.

Examples of weaknesses or poor practices observed by National Highways

• Purposely over applying for payments in the hope costs that suppliers are not entitled to will “go through” unnoticed or missed by checks.
• Cost for ‘ghost’ employees and plant being applied for at either the subcontract or main contract level
• Discrepancies between the direct fee percentage stated in the draft contract and fee applied within applications for payment
• Weaknesses in the review of plant accruals and off-hiring of plant
• Potential for suppliers or individuals within suppliers colluding with labour suppliers when agreeing rates or supply
• Staff costs and timesheets; irregularities or lack of supporting evidence (potential claims of false records)
• Escalating supplier costs post-award
• Significant changes to scope to that tendered post-award
• Favouring certain suppliers (potential bribery)
• Ensuring professional standards are applied to tender evaluations following prescribed procedures
• Compliance with the requirements to obtain three or more quotations for subcontract work, where applicable.